2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The activity of the company is not easy and always responsible. Much in the internal affairs of the company is based on mutual respect and trust. Unfortunately, there are still frequent cases when employees neglect the trust placed in them and commit actions that entail administrative and, at times, criminal liability. For this reason, it is necessary to carry out activities that can be designated as internal control.
The concept of internal control
A company's own audit has many applications, but the main purpose can be found in the definition of this concept. Internal control is a set of measures carried out by an authorized person or group of persons, at the initiative of the head (in order to prevent possible threats).
Based on the definition, internal control is primarily aimed at identifying deficiencies and correcting them in order to avoid consequences when audited by government authorities.
Functionregulation
Among other things, internal control performs a regulatory function. A reliable and well-thought-out system for monitoring the activities of employees of the enterprise eliminates the possibility of committing illegal actions. As you know, crimes are committed where there is no order. Internal control is designed to ensure the order and organicity of the actions performed by each employee of the company.
Accountability function
Internal control builds the company's employees into a certain hierarchy, which implies mutual monitoring of compliance with job duties. Thus, each employee is responsible for his work not only to himself, but also to his colleagues.
Application areas
The company's internal control system can be successfully used in any field of activity. Of course, when the number of employees is small, it is not so difficult to exercise control, but even with the number of employees equal to several dozen, it is necessary to create a special functional unit that will perform the appropriate functions.
In addition, there are areas of activity for which a high-quality internal control system is essential. These are areas related to deposits, financial transactions, insurance premiums and payments, as well as companies whose activities are related to objects or resources that are significant for the state. For example, internal control in a bank is carried out by settingvideo (and sound) recording equipment, a rigid system of regulation of operations, constant checking of documents by several people, and in many other ways.
Strong internal controls can save a company from a lot of trouble, such as detecting and preventing illegal activities of individuals in time. This type of control can be carried out in different ways. Among them: the creation of a specialized department at the enterprise, the organization of a working group of specialists from different departments, the involvement of private audit companies.
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